From 27 October 2008 Employment and Support Allowance will apply to new customers replacing Incapacity Benefit and Income Support (paid on incapacity grounds). Existing customers will initially continue to receive their existing benefits so long as they continue to satisfy the entitlement conditions.
Incapacity Benefit is payable to people who are ill or disabled and have been incapable of work for four or more days in a row and who are not entitled to Statutory Sick Pay.
The Short Term (lower) rate is tax-free, but the Short Term (higher) and Long Term rates are taxable.
To get Incapacity Benefit a person must have paid enough National Insurance Contributions at the right rate and the right time.
People who live in a Jobs & Benefits office area will be offered an enhanced claims service.
For all new or repeat claims customers must comply with a work focused interview with a Jobs & Benefits Adviser.
Failure to do so may result in the loss of benefit.
Incapacity Benefit is based on a person's incapacity for:
- work in their normal occupation for the first 28 weeks of incapacity (The own occupation test)
- all work from the 29th week of incapacity (The Personal Capability Assessment)
A person is treated as having a normal occupation if they have worked for 16 hours or more a week, for more than 8 weeks out of the 21 weeks prior to the start of the claim.
A person will be subject to the Personal Capability Assessment from the start of the claim if they had no regular occupation prior to this.
Former Invalidity Benefit Claims
The Personal Capability Assessment applies to previous Invalidity Benefit recipients with the following exceptions:
(1)people, aged 58 or over on 13 April 1995, who were continuously in receipt of benefit (ignoring breaks of 8 weeks or less) since 1 December 1993; or
(3)people suffering from one of a number of prescribed severe illnesses.
Additional Pension is frozen at the 1994 rates.
Entitlement to Invalidity Allowance remains.
Medical certificates are required to cover incapacity until the person has passed the Personal Capability Assessment and has been advised that medical evidence is no longer required. Medical evidence is required for the duration of the claim for people in group (1) above.
Effect on Income Support claims
All claims to Income Support based on incapacity are subject to the medical test.
With some exceptions the medical test will apply to Income Support recipients who were in receipt of benefit prior to the 13 April 1995.
Qualification for the Income Support Disability Premium will be 52 weeks with the following exceptions:
- people already receiving the premium on 13 April 1995;
- people receiving the premium through Severe Disablement Allowance;
- people entitled to the premium on other grounds, e.g.
- they get Disability Living Allowance
- they are registered blind etc.
New claims
If you are over pension age you cannot make a new claim for Incapacity Benefit.
Long Term Incapacity Benefit ceases at pension age.
Where a person reaches pension age after incapacity has commenced, Short Term Incapacity Benefit may be payable for up to 52 weeks.
Clients will not be subject to Income Tax if they were in receipt of Invalidity Benefit prior to 13 April 1995.
For all other cases tax will only be due if the person's Incapacity Benefit and any other taxable income exceeds their tax allowance.
Clients with other taxable income e.g. Occupational pension will receive gross Incapacity Benefit.
Tax will be recovered by adjustment of the customers tax code which is being applied to their other income.
Clients who are due to pay tax on sole income of Incapacity Benefit will have the tax deducted from their benefit, on behalf of HM Revenue & Customs by the Social Security Agency.
Incapacity Benefit is paid by direct payment into an account every two weeks, four weeks or thirteen weeks
A customer who is receiving Incapacity Benefit may only work in permitted circumstances.
Permitted work introduces more flexible rules for people who want to try paid work while still getting Incapacity Benefit because of illness or disability.
You can:
- work for less than 16 hours a week, on average, and earn no more than £93.00 a week for 52 weeks, or
- work for less than 16 hours a week, on average, and earn up to £93.00 a week for as long as your illness or disability is considered sufficiently severe that you meet the threshold of incapacity without undergoing a medical assessment, or
- work and earn up to £20 a week, at any time, for as long as you are on benefit, or
- do supported permitted work and earn no more than £93.00 a week for as long as you are on benefit.
We use supported permitted work to mean work that is supervised by someone who is employed by a public or local authority, or a voluntary organisation, whose job it is to arrange work for people with disabilities. This could be work done in the community or in a sheltered workshop. It also includes work as part of a hospital treatment programme.
You do not need your doctor's approval to start permitted work.
If you make a new claim for Incapacity Benefit we may take any pension income over £85 a week into account when we work out how much money you are due.
If your pension income increases or decreases you must tell us straightaway as this may affect the amount of Incapacity Benefit you get.
By pension income we mean one of the following pensions
- occupational pension
- personal pension
- public service pension
- stakeholder pension
- a pension from a self-employed pension scheme
- permanent health insurance payments arranged by an employer and the contract of employment has ended
- pension protection fund payments due to employer insolvency.
People who are entitled to Long Term Incapacity Benefit, who have worked and paid or are treated as having paid full rate Class 1 National Insurance Contributions for at least 10% of their working life since 1978, may, from 6 April 2002, start to accrue Additional State Pension through State Second Pension. - See Retirement Pension for further information.
If a customer does not understand or disagrees with a decision, they can ask for an explanation and/or for the decision to be looked at again. They also have the right of appeal.
care component or are terminally ill; or